Mumsnet has not checked the qualifications of anyone posting here. Free legal advice is available from a Citizen's Advice Bureau, and the Law Society can supply a list of local solicitors.

Tax credits and savings

(28 Posts)
EldonAve Mon 19-Aug-13 16:35:32

Can you claim tax credits if you have savings? I know there used to be a £16K limit - does this still apply?

OrangeFlower7 Sun 25-Aug-13 14:17:16

Thanks ivykaty

HystericalParoxysm Sat 24-Aug-13 23:24:42

So, morethan, what does that mean for anyone with a property they rent out? Is that a business?

morethanpotatoprints Sat 24-Aug-13 21:33:16

For tax credit purposes, I don't think so. I was told it was income only, you can have an inheritance and it not count as earnings.

Under UC you can still have property you don't live in if your business is property development and you are paid a wage. You couldn't be expected to live in several properties at once. You are expected to be running the house like a business though and be providing tax returns.

ivykaty44 Sat 24-Aug-13 21:26:33

For Universal Credit, if you or you and a partner have over £16,000 of ‘capital’ (like savings, investments, certain compensation payments or property which you do not live in) you will not be able to receive any Universal Credit.

If you have between £6,000 and £16,000 the Government presumes you are getting some income from this ‘capital’ (like interest from savings, or dividends from shares). For every £250 of ‘capital’ over £6,000 you will be treated as having £1 a week in income. If you have less than £6,000 in ‘capital’, your Universal Credit claim will not be affected at all.

dandydorset Sat 24-Aug-13 21:01:48

hi,how do i find out the rules regardind UC and savings

im going round in circles

thanks

ivykaty44 Sat 24-Aug-13 11:49:19

Universal Credit was introduced in parts of Greater Manchester and Cheshire on 29 April 2013. From October 2013 it will be gradually introduced in other areas across the UK.
Most people getting tax credits aren't affected at this stage. Even if you live in one of the areas where Universal Credit is introduced, your tax credits payments will continue as normal.

If your circumstances change
You should continue to report changes in your circumstances that could affect your tax credits as soon as possible.
You will be affected if you start living with a partner who gets Universal Credit. If this happens, you may be able to claim Universal Credit with your new partner, and your tax credits payments will stop. This is because you can't claim Universal Credit and tax credits at the same time. The Tax Credit Office will be told if you start getting Universal Credit. They will stop your tax credits payments and will write to tell you that they have done this.

OrangeFlower7 Sat 24-Aug-13 10:38:01

We live in bath, so you know does it mean for new claims in those areas or for everyone <worried>

ivykaty44 Sat 24-Aug-13 09:27:53

October 2013 - April 2014

From October 2013 Universal Credit will expand to 6 new Jobcentres:

Hammersmith
Rugby
Inverness
Harrogate
Bath
Shotton
The Claimant Commitment will also be rolled out with all Jobcentres moving to the new Universal Credit commitment regime.

ivykaty44 Sat 24-Aug-13 09:26:48

Universal Credit: Timetable

There are currently around 12.5 million claims in place for the benefits that will be replaced by Universal Credit. Because of the number of people affected the introduction of UC will be phased in between 2013 and 2017.

EldonAve Fri 23-Aug-13 18:05:51

you'll only get UC if you are in an area where they have started it I think

HystericalParoxysm Thu 22-Aug-13 22:16:20

Sorry to go on but I'm just trying to get this clear in my head... Won't anyone reporting a change of circumstances from October get put onto UC though?

ivykaty44 Thu 22-Aug-13 16:49:44

HP - those people on TC will stay on tax credits

new claims from October in 6 possible areas will start on UC

those people on TC in the same area will still stay on TC and go by that set of rules

eventually (or not) they will roll it out to other areas - but still those already claiming tax credits will stay the same

then as they figure it out (or not) they will start to move people on TC over to the new system and new rules - which will take up until 2017 (but it is already 12 months late on schedule so it could be 2025 for all we know)

Rockchick1984 Wed 21-Aug-13 23:37:43

HP they will be, however not as early as October. The rollout is going to take around 3 years until they change the plans again

HystericalParoxysm Wed 21-Aug-13 20:03:45

But tax credits are going to be included in universal credit!

ivykaty44 Wed 21-Aug-13 19:19:36

HP that is the rules for Universal Credit not tax credit. UC has not been and will not be introduced country wide in October and in any case the claims for TC will not be made until April - as UC is not being rolled out for the forceable future as it is not yet ready and probably will not be until after the next general election....in 2015 (thats if the Tory party want anyone to vote for them as it will be so shambolic when it is introduced it is not something they want fresh in voters minds)

HystericalParoxysm Wed 21-Aug-13 11:58:30

But be aware this is changing from October so the actual savings will count against you, not just the income.

ivykaty44 Tue 20-Aug-13 19:48:45

PB don't earn interest it is a gamble whether you win - are the winnings tax free or not, but then you would only have to pya tax if you won and declare if you won

Monkeyandanimal Tue 20-Aug-13 19:13:19

What about cash in premium bonds? are they taxed savings?

MissMarplesBloomers Tue 20-Aug-13 16:54:19

Ah thanks for clarifying for me too!

ivykaty44 Tue 20-Aug-13 15:39:13

it is income from saving which is taxed so if you have for example

£3k in an ISA account then the interest would not be countable as it is not taxed

But if you had £3k in a high street building society account and you pay tax on the interest then it will count when you claim TC

EldonAve Tue 20-Aug-13 13:55:21

thanks

Rockchick1984 Mon 19-Aug-13 17:22:46

It's income from savings, the amount of savings is irrelevant for tax credits (most other means-tested benefits have a savings limit).

EldonAve Mon 19-Aug-13 17:03:32

Thanks, I've seen the income from savings mentioned

HappySunflower Mon 19-Aug-13 16:49:53

I'm pretty sure that its the interest/income from savings that is taken into account-not the actual savings.

MissMarplesBloomers Mon 19-Aug-13 16:44:31

Actually it was £16k income pa not sure what the criteria are/is for savings but probably about the same.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now